New York’s Appellate Division, First Department (Appellate Division) issued a significant wage and hour decision on September 10 that will require employers to reevaluate their frequency of pay practices and policies. In Vega v. CM & Associates Construction Management, LLC, the Appellate Division held that “manual workers” who were paid in full, but on a biweekly or later basis, could recover liquidated damages because their employer failed to pay them on a weekly basis, as required under the New York Labor Law (NYLL).
Labor Law § 191(1)(a) requires that manual workers be “paid weekly and not later than seven calendar days after the end of the week in which wages are earned.”
The term “manual worker” is defined under NYLL as “a mechanic, workingman or laborer.” Its statutory definition and the New York Department of Labor’s (the Department’s) interpretation of the statute extends beyond what the general public might consider to be a manual worker to generally include individuals who spend more than 25% of their working time engaged in “physical labor.” Additionally, the Department interprets “physical labor” to broadly include multiple physical tasks performed by employees. These tasks do not have to be strenuous or taxing.
By way of example, the statute makes clear that construction workers and handymen are considered “manual workers.” Additionally, the Department has taken the position that workers who engage in supplementary physical activity as part of their job duties—such as barbers, hairdressers, chauffeurs, and positions that require the worker to do “light to medium lifting and carrying of objects”—are also “manual workers” under New York’s frequency of pay requirements and, therefore, must be paid weekly.
Plaintiff Irma Vega filed a class action complaint alleging that she and all similarly situated “manual workers” were paid on at least a biweekly basis in violation of NYLL. Ms. Vega was a construction worker, so it was undisputed that she was a “manual worker” under the law and was entitled to payments on a weekly basis. It was unclear, however, whether she had a private cause of action under the frequency of pay statute and if so, whether she was entitled to damages because she had already been paid in full by her employer, albeit approximately one week later than required on two cycles per month.
The employer argued that the statutory framework did not permit an employee to bring a private cause of action against it under the NYLL’s frequency of pay provisions. Rather, the employer argued, an employee could only bring a claim for underpayment or nonpayment of wages – not late payment. Further, the employer argued that even if there was a cognizable private cause of action, it could not be subject to liability because the employer had “cured” any violation by paying the employees in full before commencement of the action.
Contrary to prior court decisions, the appellate court in Vega found that an employee who was paid wages in full, albeit late, can maintain a private cause of action against his/her employer. Generally, before Vega,courts had found that the NYLL did not provide plaintiff-employees with a private cause of action under the frequency of payment provision where the employees did not allege underpayment or nonpayment of wages. Stated differently, employees who were not timely paid were not entitled to bring a private cause of action where the employer already paid the employee all compensation owed.
While the Appellate Division acknowledged that the NYLL does not expressly authorize a private cause of action for frequency of pay violations, it stated that a remedy may be implied where “recognition of a private right of action would promote the legislative purpose of the statute and the creation of such a right would be consistent with the legislative scheme.” According to the court, allowing Ms. Vega to bring a lawsuit for a clear violation of the frequency of pay law promotes the legislative purpose of the law and protects workers’ rights – a primary goal of the NYLL.
The Appellate Division also found that full payment prior to the commencement of the action did not “eviscerate the employee’s statutory remedies.” Instead, it applied the liquidated damages analysis utilized under the federal Fair Labor Standards Act and held that employees are entitled to liquidated damages as a remedy for untimely payment of wages, in addition to the complete nonpayment or partial payment.
Absent a contrary ruling by the New York Court of Appeals, employers are encouraged to review their payment practices and analyze their employees’ job duties to determine whether they are “manual workers” under the NYLL for the purposes of the frequency of pay laws. Although the Vega decision dealt with manual workers, the decision also has broader implications with respect to damages for violations of the NYLL’s frequency of pay provisions for other categories of workers. With a six-year statute of limitations, payments made in violation of the NYLL potentially open employers up to substantial liability going forward.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers: